McDermott announces relocation to Mexico

Tuesday

Sep 24, 2013 at 5:53 PM

A titan of the area’s oil and gas heyday moved to Mexico this year.

Xerxes WilsonStaff Writer

A titan of the area’s oil and gas heyday moved to Mexico this year. McDermott International’s Amelia yard is slowly being shuttered. The 325-acre facility on the border of Assumption and St. Mary parishes employed thousands over six decades. In August, McDermott International announced the yard will close this year as it reshuffles its Atlantic assets to line up with an evolving oilfield.“Anybody is going to know someone who worked there or had a family member who worked there. It was king at one time, and a good part of the industry you see today kind of grew around it,” said Vic Lafont, CEO of the South Louisiana Economic Council.The yard opened in 1956 when the Gulf of Mexico oilfield was a much different place. Amelia, known as the Morgan City facility because of its proximity to that community, was the “oil city” of the South with the McDermott yard as a crown jewel.“Morgan City was the Port Fourchon for the shelf back in that time,” said Ted Falgout, who spent more than 30 years directing the Greater Lafourche Port Commission. “McDermott was a cornerstone of the energy industry, and nothing went on without McDermott either bidding on it or performing the work, and there were gobs of employees.”The company generated tens of millions in property taxes for Assumption Parish and employed workers from as far away as New Iberia and Hammond.“At some points they would get up to 3,000 to 4,000 people working there in the early ’80s when the industry was doing really good,” said St. Mary Parish President Paul Naquin. “It was the center of the oil patch. Our economy depended on it with the labor force there. I can show you times where they were 50 percent of our workforce.”For Dane Hebert it provided him with a base to raise a family.“Things were good; the pay at the time was good,” Hebert said. “We raised a family, bought cars, homes and boats through it. It was a good place to work.”Respect from peers and bankers alike came easy with J. Ray McDermott on your shirt, he said.“You were held in high regard when you worked for McDermott,” said Gulf Island Fabrication CEO Kirk Meche, who worked in the yard as a structural engineer out of college. “They were the leader in the ’70s and early ’80s for fabrication. When one of their massive projects loaded out, they would have another coming in. There was an endless cycle.”Meche said the yard made a lasting contribution to the local oilfield brain trust.“It was the best training ground that existed in the ’80s and ’90s for those young engineers coming out of school. It gave us tremendous prospects to travel and see different parts of the world and get different experiences,” Meche said.Meche estimated 80 to 90 percent of his management team worked with or for McDermott previously.The yard was home to many first-time projects setting the bar deeper for platform construction.“When you know that is something that is going to be recognized around the globe, doesn’t that motivate the hell out of you? Either it is a prototype, the largest or whatever. It’s going to be recognized globally; that’s all I need to wake up in the morning,” said Willard Wright, who started working in the yard as a tacker in 1980.Wright recalled working on oddities like The American Queen, a steam-powered paddle boat, a futuristic U.S. Navy prototype and extending two boats that helped find the Titanic’s wreckage in the ’80s before McDermott sold its shipbuilding operations in Amelia to Bollinger Shipyards.In the late ’90s, the company dedicated the yard to BP’s Holstein, Mad Dog, Atlantis and Crazy Horse projects in the deepwater Gulf of Mexico.“Thunderhorse was my baby,” Wright said. “I had never worked on anything like that in my life. It was something to be a part of.”Hebert said as those projects began to wane, McDermott began hiring more contractors. The projects were outgrowing the yard, and he knew the facility’s days were numbered.McDermott chief executive Stephen Johnson said the decision to close the yard came after years of under-utilization as customers’ demands moved toward deeper waters that require projects too big for the yard.The yard’s handicapping shallow waters were blamed in company statements and when Gov. Bobby Jindal visited the facility in August.The Amelia fabrication and marine activities will be relocated to Altamira, Mexico, which provides access to deepwater and a competitive cost structure, Johnson said.Former longtime Gulf Island Fabrication CEO Kerry Chauvin said the Gulf Coast was once lined with oilfield fabrication yards, but only two or three major players remain in the region, not counting the shipbuilders.Most major platform floaters or jackets are built overseas now, he said, noting foreign governments often subsidize shipyards where the labor is cheaper. American fabricators still have a foothold building topsides, which are more technically oriented, he added.The yard’s permanent employment had dwindled to 350 by the time August’s announcement came, but local politicians and business leaders said those employees should have little trouble finding work.“I can assure you that the 350 employees at McDermott, we can pick that up and even 1,000 more today in St. Mary. That is how bad we need skilled labor,” Naquin said.Some employees said the decision to focus fabrication work in Mexico is a bitter way to end their decades-long work there.“It does leave a little bit of a bad taste,” said Wright, who had been laid off and returned some four times before his final layoff notice. The day he got laid off, he was able to find a job at K&K Marine nearby.Others said they place no blame on the company.“I’m sad to see it go. It was a part of my life. McDermott played an important role in my life and my family’s life,” Hebert said. “When they first started out, it was perfect. I would say the industry kind of overgrew that yard.”

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